Appellate court upholds convictions in North Birmingham scandal, but opinon suggests David Roberson's $75-million lawsuit is based solidly in fact

 

A three-judge panel of the U.S. 11th Circuit Court of Appeals has upheld the criminal convictions of former Drummond Company executive David Roberson and former Balch & Bingham attorney Joel Gilbert. What is next in activities related to the North Birmingham Superfund bribery scandal? That remains unclear, but defense attorneys are expected to seek an en banc review from the full 11th Circuit.

The ruling certainly is not good news for Roberson, but it might be worse news for Balch. The opinion suggests Balch, in fact, deceived Roberson (and Drummond, for that matter), indicating Roberson's pending $75-million lawsuit has sold grounding in fact. The opinion even hints that Drummond could have valid civil claims against Balch, although such actions might be time-barred by now.

From a report at banbalch.com, under the headline: "Appeals Court Affirms Criminal Convictions of Roberson and Gilbert; Balch Skewered":

The U.S. Court of Appeals for the 11th Circuit affirmed the criminal convictions of ex-Balch partner Joel I. Gilbert and ex-Drummond executive David Roberson in the North Birmingham Bribery Scandal.

The court issued a 37-page opinion in the unanimous 3-0 decision.

The court skewered  Balch & Bingham, writing:

Although Appellants attempt to paint the agreement between Balch and the Oliver Robinson Foundation as some sort of permissible advocacy campaign, as indicated Gilbert testified that the Foundation was the only entity asked to submit a proposal and that Gilbert and the Balch firm did not do any due diligence on the Foundation’s ability to do the work.

No due diligence! The only entity!

Investigators need to now probe how many others at Balch were involved in this criminal racket and who on Balch’s executive management board knew about it.

Alabama Power which was regularly briefed on the North Birmingham matter also needs to be probed.

The lone-wolf theory that Gilbert was the sole decision maker and mastermind appears to be unequivocally false.

Issues raised by the panel opinion do not end there. Here is more from banbalch.com: 

Even more troubling is footnote number 28.

The court writes:

In particular, [Mike] Tracy, the CEO of Drummond Company, stated that Gilbert told him that the arrangement with Representative Robinson was legal, during a meeting in which Roberson was present…. Additionally, Gilbert stated during cross-examination that he assured both Tracy and Roberson that everything was legal and ethical.

The Court of Appeals affirms that Balch & Bingham’s top partner did indeed mislead Drummond Company, Mike Tracy, and Roberson.

No doubt now that Roberson’s $75 million civil lawsuit against Balch and Drummond is more than justified.

Has Roberson paid  a price for listening to Balch's game of shuck and jive? Yes, a very high price:

Listening to Balch’s alleged lies and falsehoods, Roberson has seen his life utterly collapse in shambles. From selling the family home to an estate sale, the humiliation has been overwhelming.

Instead of backing him, Drummond Company and ex-CEO Mike Tracy foolishly threw Roberson under the bus and marched goose-step with Balch six months after Roberson’s conviction.

The question now is, why? Was Roberson a “fall guy” and set-up by others?

Drummomd Company and Tracy should face federal scrutiny.

We now expect an en banc appeal to be filed in hopes that the entire 11th Circuit hears the case, while lawyers frantically try to stall or delay Gilbert and Roberson from having to report to federal prison.

Rebirth of David Roberson's $75-million lawsuit against Balch draws coverage from Bloomberg, with focus on misrepresentation and concealment

Bloomberg terminal

The full rebirth of David Roberson's $75-million lawsuit against his former employer, Drummond Company, and Balch & Bingham has drawn the attention of the national media. The Roberson case came roaring back to life on January 21 when the Alabama Supreme Court reversed itself . . . and found a Jefferson County circuit judge wrongfully dismissed . . . claims against the Birmingham law firm. Drummond already had failed in its efforts to be dismissed from the lawsuit, so the 1/21 ruling means Roberson's $75-million lawsuit will move forward against both the coal giant and its law firm.

The reversal did not escape the attention of Bloomberg News, according to a report at banbalch.com (BB). Writes BB Publisher K.B. Forbes:

We called the Alabama Supreme Court decision on ex-Drummond executive David Roberson’s $75 million civil suit a possible “lethal blow” to embattled law firm Balch & Bingham.

Now the national media has begun focusing on the narrative and the initial reports appear to be devastating.

Bloomberg News writes:

Roberson sued [Balch & Bingham] and his former employer in March 2019, alleging negligence, fraud, suppression, and implied imdemnity against the firm.

Alabama’s top court…grant[ed] an application for rehearing on claims against Balch & Bingham for misrepresention and concealment based on allegations that Roberson had previously asked the firm’s in-house ethics attorneys if the plan for which he was convicted was legal.

Misrepresention and concealment are stinging words but accurate.

Forbes traces the Bloomberg report to the testimony of Balch attorney Chad Pilcher in the North Birmingham Superfund bribery trial:

During Day 11 (July 11, 2018) of the criminal trial of the North Birmingham Bribery Scandal, we posted:

The real bomb that dropped today was that of Chad Pilcher, a Balch & Bingham government affairs attorney who testified that he warned [Balch partner] Joel Gilbert about using State Representative Oliver Robinson’s position or letterhead. Pilcher regularly consults with the Alabama Ethics Commission, he testified.

John Archibald of AL.com tweet[ed]:

Pilcher said he warned Gilbert that Robinson could not use his official position or letterhead to help. Gilbert, documents show, edited Robinson’s position into letters sent in Robinson’s name.

Pilcher is the first Balch lawyer on the stand who remembers his advice and involvement, and who recalls the Robinson contract and states his questions about pitfalls of hiring a legislator to carry your water. Was worried that Robinson himself broke the law, so he told Gilbert.

Kyle Whitmire commented that the testimony not only hurts the defendants, it “makes the defense attorneys look stupid. This whole trial, they’ve been setting up Pilcher to be the guy who gave the OK.”

Things got even messier when another Balch attorney, Joel Gilbert, took the stand:

Two days later on Day 13 of the trial (July 16, 2018) , Gilbert was grilled by the prosecution. As we wrote at the time:

John Archibald of AL.com tweets what appears to be the most damning exchanges:

Gilbert wrote letters for Shelby, Sessions, he said. For Mayor Tuck in Tarrant and resolutions for Jeffco and Tarrant. And more. Only elected official B/B had contract with was Oliver Robinson, he says.

Gilbert acknowledges he didn’t talk to his firm’s “ethics people” (Greg Butrus) until at least a year after he contracted Oliver Robinson. Didn’t tell the “ethics people” Robinson met with EPA and AEMC etc. etc.

Although Roberson’s lawsuit is under seal, locked away in a secret Star Chamber, the testimony at the criminal trial was stunning and hit hard.

Balch-made millionaire Gilbert appears to have concealed the truth from Roberson. Balch says in court pleadings that the firm “owed no duty” to Roberson and while Balch attorneys testify that misleading or lying to Roberson with wrong or untruthful advice is a bona-fide legal service.

Bona-fide idiots, indeed!

As Matrix "melts down," the "Three Stooges" bumble, and Roberson lawsuit rises from the dead, feds need to unearth a full cast of North Birmingham wrongdoers

Jay Town and Mark Croswhite at Moon Shine Lounge

 

U.S. District Judge Abdul Kallon wrote during the North Birmingham Superfund bribery trial that grand-jury testimony indicated more than one or two Balch & Bingham attorneys were involved in the scheme to bribe former State Rep. Oliver Robinson (D-Birmingham). David Roberson, the former Drummond Company vice president who was convicted in the case (along with former Balch lawyer Joel Gilbert), later told The Washington Post that roughly 20 Balch attorneys were involved in the scandal.

So why were only two Balch lawyers indicted in the case -- and Steven McKinney eventually was dismissed? How many bad actors did federal investigators miss, because of false testimony, doctored evidence, or orders from someone above their heads? Those questions hang heavy in the air, especially now that Balch has been returned as a defendant to Roberson's $75-million civil case -- and evidence mounts that the criminal trial might have only scratched the surface of possible wrongdoing.

Those questions, and more, receive an airing at banbalch.com under the headline "More Federal Criminal Indictments Needed Against Three Stooges." Writes Publisher K.B. Forbes:

In 2017, we asked, who on Balch’s Executive Committee knew about the bribery scheme?

As the judge in the criminal case wrote during the trial, “[Balch partner Joel I.] Gilbert told the grand jury that others at the law firm ‘were aware of [the] engagement’ of Robinson on behalf of Roberson’s employer, and Defendant [Balch partner Steven] McKinney testified that Gilbert told him that ‘the government affairs guys vetted [the agreement with Robinson’s Foundation] and said it was okay.'”

But Gilbert had lied to McKinney as he had done to Roberson.

David Roberson told The Washington Post in 2020 that beyond convicted felon and ex-Balch partner Joel I. Gilbert, allegedly another 20 Balch & Bingham attorneys were involved in the North Birmingham Bribery Scandal.

So how many Balch partners or attorneys were involved in stamping their seal of approval on the purchase of corrupt politician Oliver Robinson?

How many more individuals at Balch knowingly were involved in processing the over $360,000 in bribes to Robinson?

That might be the single biggest question surrounding the Superfund Scandal, and answers could flow from the Roberson civil case. But the matter should not end there, Forbes writes, pointing a finger directly at the "Three Stooges" referenced in his headline:

With the Alabama Supreme Court saying Balch must stand trial for fraud in ex-Drummond executive David Roberson’s $75-million civil lawsuit, more criminal indictments are needed.

The Three Stooges of this horrific saga known as the North Birmingham Bribery Scandal need to be held accountable.

The rebirth of the North Birmingham Bribery Scandal may go on for another three or four years in secret, in a sealed and closed Star Chamber.

However, federal investigators can and must dig deep into the shenanigans.

Larry, Curly and Moe have been replaced by “Lying” Balch, “Confused” Drummond, and “Unmentionable” Alabama Power.

As for doctored evidence, signs of that have only grown since the criminal trial. Writes Forbes:

How many documents, invoices, and/or emails have been tampered with and by whom?

On December 1, 2014, convicted ex-Balch & Bingham partner Joel I. Gilbert dispatched a letter of intimidation to GASP, the health and environmental public charity that they tried to undercut.

According to Balch billing documents, Gilbert may have been on vacation the week of Thanksgiving 2014, because his last billing is for Friday, November 21, 2014. The letter is dated December 1, 2014, a Monday, but nothing shows up in the December billings.

Who paid for that letter? Were there alterations of billing documents and invoices?

Balch allegedly may have provided a manipulated invoice to federal authorities during the North Birmingham Bribery Trial as the original invoice.

Drummond claimed in pleadings before the Roberson case was sealed in its entirety that “Balch’s first draft of the invoice was incorrectly addressed to Blake Andrews (the company's general counsel) …”

Drummond’s lawyers were so furious that the original invoice was being used in the $75 million civil lawsuit, Drummond even subpoenaed the former secretary of convicted felon and ex-Balch partner Joel I. Gilbert. She handwrote “It should be David Roberson” on the invoice.

Who really cares who actually scribbled down the change?

The undisputed fact is the original invoice was changed. Was Roberson duped, signed off on the corrupt invoice, and set up as the “fall guy?”

Federal investigators need to only look at an example of the alleged alteration of evidence in the Newsome Conspiracy Case—the future RICO suit against Balch that currently is awaiting further indictments.

Nothing should surprise federal investigators. Nothing.

What about a possible immunity deal that likely would have allowed Roberson to shine stark light on the scandal -- and kept him out of prison? Why was it rejected?

According to sources, the federal government wanted Roberson to honestly testify about the alleged bribes from Drummond Company to politicians.

The testimony the feds also sought included details of an alleged bribery ring of “do-not-ask” but “just-send-the-check” co-conspirators. But Roberson’s criminal attorneys allegedly rejected a full-immunity deal. Roberson would be a free man today.

With the criminal attorneys being paid generously by Drummond Company, some observers wonder: Was the rejection of the immunity deal done solely for Drummond’s benefit at Roberson’s expense?

Meanwhile, the Matrix Meltdown, which includes revelations about Alabama Power, slowly is playing out in Alabama and Florida. Where might that lead? Forbes provides clues:

What really angered Alabama Power is the alleged secret deal with disgraced U.S. Attorney Jay E. Town in which Alabama Power was “unmentionable” during the criminal trial. Company representatives have called the allegations a “conspiracy theory.”

The jaw-dropping photos of Town and Crosswhite at the Moon Shine Lounge are not a “conspiracy theory.”

Now Alabama Power has more controversy, with alleged secret indemnity agreements and multi-million-dollar contracts not requiring detailed invoicing.

The Matrix Meltdown is causing a storm of documents to be leaked and a published report outlined how Alabama Power allegedly dished out $2.5-million to Joe Perkins, the founder of the obscure political consulting firm Matrix, without the need to provide itemized invoices.

For years, incredible rumors and colorful innuendo circulated around Matrix, now in the middle of an ugly, two-state divorce between founder Joe Perkins and his once-protege Jeff Pitts.

The allegations include using actors, smearing political opponents, setting up AstroTurf campaigns, hiring brain-dead journalists, engaging in fear-tactics, and more.

Federal investigators reportedly are sniffing along that trail. Where, and to whom, might that inquiry lead?

Alabama Supreme Court denies Drummond's request to be treated like a law firm, paving the way for a possible trial in David Roberson's $75-million lawsuit

Alabama Supreme Court

 

The Alabama Supreme Court has denied Drummond Company's request for a writ of mandamus, apparently setting up a trial in the $75-million lawsuit of former executive David Roberson, according to a report at banbalch.com. Jefferson County trial-court judge Tamara Harris Johnson has sealed the case file, so it's hard to fully understand the ramifications of the high court's order. But it appears Roberson and his legal team have cleared a major hurdle in a civil matter that grew from the North Birmingham Superfund criminal case. Reports banbalch.com under the headline "Unanimous! Drummond Company to Stand Trial; Floodgates Open":

Last week, the Alabama Supreme Court unanimously rejected Drummond Company’s Writ of Mandamus against ex-Drummond executive David Roberson’s $75 million civil lawsuit with one word, “Denied.”

In their 46-page Writ filed last December, Drummond summarized their grave concern claiming, “A man—convicted by a jury of his peers for bribery, money laundering, and fraud—has now sued his employer and a law firm claiming they caused him to be wrongfully convicted.“

So will we find out if Drummond, their “confused” General Counsel Blake Andrews, and other co-conspirators indeed caused Roberson to be wrongfully convicted?

The court proceedings in Jefferson County against Drummond Company have been placed under seal in another top-secret Star Chamber.

Regardless, multiple outside factors now come into play:

• The alleged high-level and unethical cocktail meeting between then-U.S. Attorney Jay E. Town and Alabama Power CEO Mark A. Crosswhite,
  
• The alleged set-up of “Fall Guy” Roberson with manipulated invoices,
• The attempted assassination of Roberson on Highway 280,
• The mysterious head-on crash against Roberson’s attorney Burt Newsome last year,
• The extreme and uncontrolled panic by the Three Stooges last December.

These factors alone may be just enough to spur federal investigations of possible criminal and prosecutorial misconduct regardless of what happens inside the Second Star Chamber.

 Drummond has argued hat it deserves the protection generally afforded law firms under the Alabama Legal Services Liabiliy Act (ALSLA). The state's high court wasn't buying it, reports banbalch.com:

Roberson has opened the floodgates against the Three Stooges (Drummond, Balch and Alabama Power) and stripped naked the drag queens at Drummond who tried to cross-dress themselves as a law firm.

Even the conservative Alabama Supreme Court did not buy the cross-dressing act.

Unanimously.

If legal precedent means anything -- and Lord knows, it's supposed to -- the state's high court had little choice but to rule as it did. Here's how we framed the issue in a post last December: 

What is that central question Drummond seeks to place before the high court? Here's how it is stated in the company's brief:

Whether a  corporation, which is not itself a legal services provider, may avail itself of the ALSLA statute of limitations where its alleged liability is based on the conduct of its general counsel, who is a legal services provider?

        The Alabama Supreme Court already has answered that question in a case styled Alabama Educ.  Ass’n v. Nelson, 770 So. 2d 1057 (Ala. 2000). Nelson involved a teacher's efforts to sue AEA under the Alabama Legal Services Liabiliy Act (ALSLA) because of alleged legal malpractice by one of the association's in-house lawyers. That appears to be analogous to Roberson's claims related to Drummond in-house counsel Blake Andrews -- and the company's efforts to seek protection of the ALSLA and its tight statute-of-limitations, which could make the Roberson lawsuit time-barred.

        But Drummond has a slight problem -- it admits that it is not a legal-services provider, and the Alabama Supreme Court held in Nelson that the ALSLA does not apply in such situations. In essence, the state's high court found in Nelson that ALSLA does not apply to the AEA -- which,  like Drummond, is not a legal-services provider -- so it could not apply to Drummond. That means Roberson's complaint is not time-barred, and Drummond's request for interlocutory appeal should  be sent to the dead letter office. Here is the key finding in Nelson:

            We note that throughout the ALSLA, the language used by the Legislature indicate               that the  Act  was intended to apply to lawyers and law firms.

As David Roberson's civil case against Drummond Company kicks into high gear, the immunity deal he rejected in criminal case is beginning to smell funny

Drummond Coal

 

Something is starting to smell funny about the immunity deal former Drummond Company executive David Roberson rejected in the North Birmingham Superfund case, according to a report at banbalch.com. Reports Publisher K.B. Forbes:

In 2017, the criminal defense team of ex-Drummond Executive David Roberson allegedly flat-out rejected a full immunity deal with the U.S. Attorney’s Office.

And what would David Roberson have done for that immunity deal?

According to sources, the federal government wanted Roberson to honestly testify about the alleged bribes from Drummond Company to politicians.

The testimony the feds also sought included details of an alleged bribery ring of “do-not-ask” but “just-send-the-check” co-conspirators.

But Roberson’s criminal attorneys allegedly rejected the deal.

With the criminal attorneys being paid generously (to this day) by Drummond Company, some observers wonder:

Was the rejection of the immunity deal done solely for Drummond’s benefit at Roberson’s expense?

The issue is coming back to life in Roberson's $75-million fraud lawsuit against Drummond and the Balch Bingham law firm, and the company's general counsel is coming under enhanced scrutiny. Writes Forbes:

Blake Andrews, General Counsel of Drummond Company, was allegedly so “confused” by the invoices in the North Birmingham Bribery Scheme, he allegedly had Roberson sign off on them as the “fall guy.”

Was “Confused” Andrews involved in any way with the rejection of this immunity deal?

Roberson’s civil litigation team is dispatching discovery requests and video deposition subpoenas.

Roberson’s civil attorneys should dig deep into Andrews' communications with Roberson’s criminal defense team and make sure there were no alleged strings-attached,  to his detriment.

What was Roberson’s reward for keeping his mouth shut and being loyal?

Drummond allegedly vowed to keep him on the payroll, pay for his criminal litigation costs, and take care of Roberson and his family.

Yet six months after his conviction, Roberson was terminated. He lost his home, his possessions, and barely can pay for the prescription drugs of his family members.

Will the prospect of intense discovery make some Drummond officials, and their Balch allies, uneasy? Writes Forbes:

Now, Roberson’s $75 million civil lawsuit against Drummond and Balch & Bingham is moving forward.

The judge refused to dismiss the promissory fraud count where the Robersons asserted they both turned down employment opportunities and the selling of their home for a profit based on Drummond’s assurances that appear to have been lies.

Drummond always has declared loyalty, absolute loyalty to their employees.

Regardless of the morality of the matter, David Roberson saved Drummond Company $100 to $150 million in costs in the North Birmingham CERLA matter.

And now some folks at Drummond appear to be “dazed and confused.

Judge Tamara Harris Johnson denies chunks of Drummond's Motion to Dismiss, meaning $75-million lawsuit from former exec David Roberson is alive

Tamara Harris Johnson

 

Drummond Company's Motion to Dismiss in a $75-million lawsuit involving former executive David Roberson has been granted in part and denied in part. That means the case will move forward to summary judgment, and perhaps, trial. Likely of most importance for the plaintiffs (Roberson and his wife, Anna), a stay on discovery has been lifted, meaning their attorney, Burt Newsome, can begin to collect evidence designed to prove their case. 

The mixed result for Drummond came from Tamara Harris Johnson, the same Jefferson County circuit judge who granted a full dismissal for co-defendant Balch Bingham law firm -- and in the process, came under heavy criticism here last week for failing to abide by Alabama law on the handling of a Motion to Dismiss.  

Johnson's order on Drummond reads like a different judge wrote it. The document appears to be well-reasoned and within the boundaries of Alabama law. Why Johnson reached such a wildly different result on two motions that are governed by the same straightforward law remains a mystery. But it means the Robersons' case is very much alive -- and the Balch appeal is under appeal to the Alabama Supreme Court, and it should be reversed, meaning the law firm is not out of the woods yet.

The Drummond order was electronically filed at 4:04 p.m. last Friday (10/30/20), the same day news broke that Balch partner and general counsel Schuyler Allen Baker Jr. had died. 

Early in the Drummond order, Johnson states:

This Court, in deciding the herein Defendant Drummond's Motion to Dismiss, has accepted as true all well-pleaded factual allegations contained within the Plaintiff's Third Amended Complaint. The Court acknowledges that Plaintiffs, in the aforementioned Complaint, have alleged factual allegations and conclusory statements; however, the Court will accept as true all well-pleaded factual allegations and view them in a light most favorable to the non-moving Parties, the herein Plaintiffs.

That is a correct statement of Alabama law, and Johnson appears to follow it throughout the Drummond ruling, listing 25 allegations she accepts as true -- as required at the Motion-to-Dismiss stage.

Here is a breakdown of Johnson's order on the various counts in Drummond's Motion to Dismiss:

Count I: Indemnification --  Roberson alleged Drummond owed a duty to indemnify him for all losses and damages suffered from performing duties assigned to him by Drummond and General Counsel Blake Andrews. Johnson found no such duty. Dismissal granted.

Count II (Misrepresentation) and Count III (Concealment) -- Roberson alleged Andrews made a number of misrepresentations regarding processing of legal bills from the company's outside counsel (Balch). Roberson further alleged Andrews claimed to be "confused" by Balch's invoices, so Roberson processed them, leading to his indictment and conviction. Johnson found Andrews was not providing legal services and Drummond was not a legal services provider, so the counts did not fall under the Alabama Legal Services Liability Act (ALSLA) and were not time-barred. Dismissal denied. 

Count IV, Conversion -- Roberson alleged Drummond took and removed from his office several items of personal property after his termination. Johnson could not find beyond a doubt that Drummond did not engage in an unauthorized wrongful taking of Roberson's property. Dismissal denied.

Count XI, Concealment by Drummond [and Balch] -- Roberson alleged that Drummond concealed it had hired a lobbyist via a contract with Balch, forming an agency relationship and making Drummond vicariously liable. Johnson found Drummond was not liable under an agency theory. Dismissal granted.

Count XI, Concealment by Drummond -- Roberson alleged Drummond had a duty to notify him that certain payments were being made to lobby the Alabama Department of Environmental Management (ADEM) to oppose the EPA listing a North Birmingham site on its National Priorities List. Johnson could not find beyond a doubt that Roberson could not prove he was owed this duty. Dismissal denied.  

Count XII, Promissory Fraud -- The Robersons alleged they relied on a representation by CEO Mike Tracy regarding David Roberson's employment, and Drummond never intended to perform the act promised. Johnson could not find beyond a doubt that Roberson could not prove all the elements of promissory Fraud. Dismissal denied.

Newly filed documents in $75-million lawsuit indicate Drummond lied in response to discovery requests regarding former exec David Roberson in EPA case

Drummond Coal

 

Documents filed last Friday in a $75-million lawsuit indicate Drummond Company lied in its response to requests for discovery. David Roberson, plaintiff and a former Drummond executive, has moved trial judge Tamara Harris Johnson for an award of attorney fees and other expenses associated with uncovering the truth in the matters related to the apparent false responses. Roberson also moved the trial court to deem the facts as admitted.

The court filings came on the same day that someone fired a ahot into Roberson's vehicle as he drove south on Highway 280 toward the office of his attorney, Burt Newsome, in Shelby County.

The apparent falsehoods in Drummond's discovery responses involve issues central to Roberson's claim that Drummond set him up to be the fall guy in the North Birmingham Superfund bribery trial. Let's take a look at each of the three issues, including Drummond's responses and Roberson's evidence suggesting the responses were false:

(1.) Payment of Balch Bingham invoices

A.  Roberson's request: Admit or deny that the original invoice from Balch Bingham for reimbursement of Balch's payment to the Oliver Robinson Foundation was addressed to Blake Andrews (Drummond's general counsel).  

B. Drummond's answer: Denied.

C. Roberson's response: Attached is the original invoice from Balch Bingham to Drummond Company for reimbursement of Balch's payment to the Oliver Robinson Foundation for Robinson to do acts that were deemed illegal and resulted in the conviction of David Roberson, which was addressed to Blake Andrews. See plaintiffs' Exhibit 1. Said invoice was located by the Robeersons after an exhaustive search.

(2.)  Roberson is made the contact for payment of invoices to the Robinson Foundation

A. Roberson's request: Admit or deny that Blake Andrews, after receiving the original invoice addressed to him for reimbursement of Balch's payments to the Oliver Robinson Foundation had Balch change the contact person on these invoices to David Roberson. 

B. Drummond's answer: Denied.

C. Roberson's response: Attached is the original invoice from Balch Bingham to Drummond Company for reimbursement of Balch's payment to the Oliver Robinson Foundation for Robinson to do acts that were deemed illegal and resulted in in the conviction of David Roberson, which was addressed to Blake Andrews. See plaintiffs' Exhibit 1. Said invoice was located by the Roberson's after an exhaustive search. Written on said invoice by Blake Andrews are the words "should be David Roberson." Attached as plaintiffs' Exhibit 2 is the new invoice that was created by Balch to David Roberson after Blake Andrews instructed the change to be made where Mr. Roberson could unknowingly be approving the illegal invoices.

(3.) Drummond's assurance that David Roberson would receive full salary and benefits throughout the criminal-appeals process.

A. Roberson's request: Admit or deny that after David Roberson's indictment and conviction for matters related to Drummond, Balch, and the proposed North Birmingham Superfund site, Drummond CEO at that time, Mike Tracy, told both David and Anna Roberson that they had nothing to worry about financially and that David Roberson would be kept on Drummond's payroll at his current salary with full benefits until the criminal appeals process was completed.

B. Drummond's answer: Denied.

C. Roberson's response: Attached is the affidavit from George Barber, former president of the Alabama Coal Association, stating that Mike Tracy told him that David Roberson would be on Drummond's payroll with full benefits throughout the appeals process and that he had communicated the same to David and Anna Roberson as well. See plaintiffs' Exhibit 3.

Alabama Judge Tamara Harris Johnson dismisses $75-million lawsuit against Balch Bingham -- but did she get it right and will it hold up on appeal?

David Roberson and family

An Alabama judge, who failed to rule for more than a year on motions in a $75-million lawsuit involving a former Drummond Company executive and his wife, has finally taken action in the case. After all that time, you might expect that Jefferson County Circuit Judge Tamara Harris Johnson surely would get her rulings correct. But she wound up getting it wrong on one of the most basic and straightforward principles of Alabama law -- the standard for reviewing a Motion to Dismiss under Rule 12(b)(6) of the Alabama Rules of Civil Procedure.

To top it off, Johnson still hasn't completed her backlog of work on the case. Drummond has had a Motion to Dismiss on file since April 2018, but Johnson is yet to rule on that. Plaintiffs have filed a Motion to Compel with the Alabama Supreme Court, seeking a ruling that would force Johnson to do her job.

In their complaint, David and Anna Roberson allege Mr. Roberson relied on false or incomplete information from two lawyers -- Joel Gilbert, of Balch Bingham, and Blake Andrews, in-house counsel for Drummond -- essentially making him the fall guy and leading to his conviction in the North Birmingham Superfund bribery scandal. As a result, David Roberson lost his job, and the Robersons lost their house and many of their possessions. The Roberson conviction currently is under appeal.

During a recent hearing via telephone conference, lawyers for defendants Balch and Drummond argued that Roberson received legal advice from Gilbert and Andrews, meaning the lawsuit is governed by the Alabama Legal Services Liability Act (ALSLA), Code of Alabama 6-5-572, and its tight (and confusing) two-year statute of limitations. Under the ALSLA, Balch and Drummond argued, the Robersons filed their claim too late, meaning it was time--barred per the defendants' Rule 12(b)(6) motions. Judge Johnson apparently bought that argument and granted Balch's Motions to Dismiss. A Notice of Appeal has been filed with the Alabama Supreme Court, and it's unclear when Johnson might rule on Drummond's motion.

Burt Newsome, attorney for the Robersons, argued that David Roberson's interactions with Gilbert and Andrews did not involve legal advice or the provision of legal services, meaning their complaint should not fall under the ALSLA and is not time-barred.

At oral argument, Balch attorney Andy Campbell urged Johnson to strictly follow the statutory language of the ALSLA. Here are some of its key definitions and provisions:

(1) LEGAL SERVICE LIABILITY ACTION.  Any action against a legal service provider in which it is alleged that some injury or damage was caused in whole or in part by the legal service provider's violation of the standard of care applicable to a legal service provider.  A legal service liability action embraces all claims for injuries or damages or wrongful death whether in contract or in tort and whether based on an intentional or unintentional act or omission. A legal services liability action embraces any form of action in which a litigant may seek legal redress for a wrong or an injury and every legal theory of recovery, whether common law or statutory, available to a litigant in a court in the State of Alabama now or in the future.

(2) LEGAL SERVICE PROVIDER.  Anyone licensed to practice law by the State of Alabama or engaged in the practice of law in the State of Alabama. The term legal service provider includes professional corporations, associations, and partnerships and the members of such professional corporations, associations, and partnerships and the persons, firms, or corporations either employed by or performing work or services for the benefit of such professional corporations, associations, and partnerships including, without limitation, law clerks, legal assistants, legal secretaries, investigators, paralegals, and couriers.

Burt Newsome

As licensed attorneys, Campbell argued, Gilbert and Andrews meet the definition of "legal service provider," and  the lawsuit over their alleged wrongs constitute a "legal service liability action," invoking the ALSLA and its statute of limitations, which could stick a dagger in the Robersons' claims.

Newsome, on the Robersons' behalf, argued that this is "an ordinary fraud case," not a legal-malpractice case -- and the dissemination of false, deceptive, or incomplete information does not constitute the provision of legal services.

We already know how most of this played out in the trial court, after a long delay. But how should it have played out, as a matter of law, and how should it play out on appeal?

(To be continued)

Drummond's request for interlocutory appeal in $75-million Roberson lawsuit is soundly rejected, proving our predictions come true every now and then

Tamara Harris Johnson

 

 

Like a lot of media types, we engage in prophecy from time to time. Political and sports coverage are filled with it, and making predictions is fun -- even when your track record, like ours, is somewhere in the "mixed bag" category -- where some predictions prove correct, some are off base, a few are close, others not so close.

But we are here today to note that, by golly, we recently nailed one -- more or less took an Aroldis Chapman fastball and parked that sucker in the cheap seats. And it came on an important subject -- the $75-million lawsuit from David Roberson against his former employer, Drummond Company. And it's all tied to a gross case of environmental racism -- the North Birmingham Superfund bribery scandal.

So, what was our prediction? It came in a post dated 11/16/20, and here's how we put it:

Drummond Company's request for an interlocutory appeal in David Roberson's $75-million lawsuit should be dead on arrival. In fact, it should not even be certified for an appeal at the trial-court level, and its request for a stay in discovery certainly should not be granted.

And what do you know, that is exactly what happened. Jefferson County Circuit Judge Tamara Harris Johnson, bless her heart, agreed with my assessment and essentially sent Drummond's request to the dead letter office. This is from Johnson's order issued last Friday (11/20/20). (The full order, which is brief, is embedded at the end of this post.):

This matter comes before the Court on Defendant Drummond Company, Inc.'s Motion to Certify Questions for Interlocutory Appeal and Motion to Stay Discovery Pending That Appeal and Plaintiff's Objection to Drummond Company's Motion to Stay Discovery and to Certify Questions for Interlocutory Appeal. . . . The prerequisites of such an Order, as is requested by the Defendant Drummond, requires a certification by this Court that, in this Court's opinion, the requested interlocutory order involves a controlling question of law as to which there is substantial ground of difference of opinion, that an immediate appeal from the Order, as is requested by the Defendant Drummond from the Court's order would materially advance the ultimate termination of the litigation, and that the appeal would avoid protracted and expensive litigation.

This Court cannot certify that it shares the necessary opinion to further the herein request for an interlocutory appeal. The Court further has considered the fact that discovery was stayed, pending a ruling on the Defendants' Motions to Dismiss. The Court FINDS that any further stay of Discovery in this matter is unwarranted.

In the interest of full disclosure, this was an easy call for me to make--but, of course, I couldn't let an opportunity pass to crow about being right -- and it surely was even easier for Johnson. From our 11/16/20 post:

What is that central question Drummond seeks to place before the high court? Here's how it is stated in the company's brief:

Whether a  corporation, which is not itself a legal services provider, may avail itself of the ALSLA statute of limitations where its alleged liability is based on the conduct of its general counsel, who is a legal services provider?

        The Alabama Supreme Court already has answered that question in a case styled Alabama Educ.             Ass’n v. Nelson, 770 So. 2d 1057 (Ala. 2000). Nelson involved a teacher's efforts to sue AEA                 under the Alabama Legal Services Liabiliy Act (ALSLA) because of alleged legal malpractice by          one of the association's in-house lawyers. That appears to be analogous to Roberson's claims                 related to Drummond in-house counsel Blake Andrews -- and the company's efforts to seek                     protection of the ALSLA and its tight statute-of-limitations, which could make the Roberson                 lawsuit time-barred.

        But Drummond has a slight problem -- it admits that it is not a legal-services provider, and the                Alabama Supreme Court held in Nelson that the ALSLA does not apply in such situations. In                essence, the state's high court found in Nelson that ALSLA does not apply to the AEA -- which,            like Drummond, is not a legal-services provider -- so it could not apply to Drummond. That means         Roberson's complaint is not time-barred, and Drummond's request for interlocutory appeal should         be sent to the dead letter office. Here is the key finding in Nelson:

        

            We note that throughout the ALSLA, the language used by the Legislature indicates             that the Act was intended to apply to lawyers and law firms. For example, §                        6-5-572(3)(a) sets out the "standard of care" a "legal service provider" is to                        observe:

"The standard of care applicable to a legal service provider is that level of such reasonable care, skill, and diligence as other similarly situated legal service providers in the same general line of practice in the same general locality ordinarily have and exercise in a like case."

        What standard of care would be applied to the AEA under this statute? We know of no         other "legal service provider" that, in regard to the AEA, might be considered to be             "similarly situated." Clearly this section contemplates that the ALSLA is to be                     applied  only to lawyers and to law firms— including professional corporation                    associations,  and partnerships—whose membership is composed solely of lawyers             acting for the  purpose of providing legal services.

 If the AEA does not qualify as a "legal services provider," it's hard to imagine how a coal-mining company, such as Drummond, could. And that's because it doesn't -- based on Alabama Supreme Court precedent.

Now that we've established that, discovery in the Roberson lawsuit can fire back up.

Alabama judge steps well outside the law in sealing the record in $75-million lawsuit related to Drummond, Balch Bingham and North Birmingham bribery case

Drummond Coal

 

An Alabama judge has sealed the record in a $75-million lawsuit related to the North Birmingham Superfund bribery scandal, according to a report at EE News (Environment & Energy Publishing, owned by Politico). That means past and future documents in the case will be off limits to the press and the public.

Are the actions of Jefferson County Circuit Judge Tamara Harris Johnson justified under the law? Our research indicates the answer is no. Should news organizations and First Amendment advocates challenge the ruling, and should the public be outraged? Absolutely.

Former Drummond Company executive David Roberson sued his former employer and the Balch Bingham law firm, alleging they conspired to make him the fall guy in the 2018 Superfund criminal trial. 

Drummond vigorously pushed for the lawsuit to be sealed, arguing that coverage from banbalch.com and Legal Schnauzer was inflammatory, prejudicial, and threatened to taint a potential jury pool. As one of the targeted journalists, I appreciate Drummond's contention that my blog's reach and influence is so widespread and powerful that it would make justice impossible for the company to obtain in the Roberson case. Drummond's court filings suggest  two one-person blogs are a threat to a regional, national, and multinational coal giant. How to describe that? "Pure rubbish" comes to mind, for starters. 

Is this a case of Alabama's "Big Mules" resorting to threats, intimidation, and underhanded court tactics to keep their secrets hidden  and protect the corporate and legal status quo in a state riddled with white-collar corruption? Sure looks that way from here.

Consider this for irony: Drummond's arguments about the sanctity of Alabama's justice system come in a case where two members of the plaintiffs' team (Roberson himself and attorney Burt Newsome) have met with violence that could have been fatal. Has Judge Johnson voiced any concern about that? Two key figures in a case under her purview could have been killed, but has she called for an investigation or been anything other than oblivious? We wouldn't know because the case is sealed.

How wacky is all of this? Reporter Sean Reilly takes a crack at describing it for EE News: 

Drummond's fortunes, like those of the coal industry generally, are now in decline, rankings by Forbes magazine indicate.

Whatever the company's eventual fate, part of its legacy will be unintended: via a corruption trial, an unprecedented, searing look into the political culture of a state where an oligarchy of business and agricultural interests often dubbed "Big Mules" has traditionally shaped policies including Alabama's tax structure and the scope of environmental regulations.

The case also exemplifies how influential companies prevail over poor minority communities. That dynamic is now meeting a new test: As a candidate, President Biden pledged to hold corporations accountable for pollution that disproportionately affects people of color. But as E&E News reported yesterday, that agenda could be stymied by both the reluctance of local regulators to take on prominent businesses and federal regulators' reluctance to aggressively intervene, as occurred in the Drummond air toxics case (Greenwire, March 22).

Three years ago, a federal jury convicted Roberson, the lobbyist, and Joel Gilbert, a onetime partner at the prominent Birmingham-based law firm Balch and Bingham LLP, of bribing a state legislator in a scheme to help Drummond avoid financial cleanup responsibility for a Superfund site in a mostly Black neighborhood in north Birmingham (E&E News PM, Nov. 19, 2018).

But their public trial also exposed the legal means that Drummond used to exercise its clout.

In 2014, for example, six of the state's House members at the time signed on to a letter drafted by Gilbert opposing the EPA proposal to add the site to the National Priorities List; that proposal, which remains in limbo, could leave Drummond on the hook for millions of dollars in expenses for remediating contaminated soil (Greenwire, Nov. 21, 2018).

Reilly then turns his attention to the Roberson civil matter:

While both Gilbert and Roberson were sentenced to prison time and lost their jobs, they remain free while waiting for the 11th U.S. Circuit Court of Appeals to rule on challenges to their respective convictions.

Other fallout from the scandal persists.

Roberson, alleging that he was a fall guy, filed a lawsuit in Alabama state court in 2019 seeking tens of millions of dollars from Drummond and Balch for "negligence, fraud and suppression." Balch has since been dropped from the litigation, although Roberson's lawyer is appealing that decision. Drummond has stated a variety of grounds for dismissing the suit. In court papers, Roberson alleged that Drummond was worried that cleanup costs for the Birmingham Superfund site could top $100 million.

But in a sign that media coverage — particularly in two blogs, Legal Schnauzer and Ban Balch & Bingham, that have chronicled the proceedings — is becoming a concern, Drummond this month filed a motion for confidentiality in the case "to prevent further prejudicial publicity of the pre-trial process."

On Friday, a judge agreed to seal the entire record at least through the trial. Roberson's attorney did not oppose the motion, her order indicates.

Drummond, which is headquartered in Birmingham, doesn't detail its finances. For 2018, however, Forbes ranked the company 165th in its roster of the nation's largest privately held companies with some $2 billion in sales. By last year, Drummond had dropped off the list entirely "due to declining revenues, as falling global demand for coal pushed prices down," the magazine reported last November.

Unlike many of its competitors, Drummond has so far avoided a trip to bankruptcy court. While its operations include a real estate development arm, the company's website proclaims a continuing passion for coal.

"We focus on our core strengths and avoid straying from our niche," the site says. "Our heart and soul is coal and we do that very well."

Drummond also seems to be pretty good at strong-arming judges. How else to explain Johnson's "confidentiality order," which veers wildly from established Alabama law?

What is the reasoning behind Johnson's order to seal? Here is the gist of it, from a link in the EE News article:

After hearing and considering sworn testimony offered by the Plaintiff and Defendants, hearing and considering arguments of counsel and reviewing and considering the aforementioned documents, along with the Alabama Supreme Court's guidelines in Holland v. Eads, 614 So.2d 1012 (Ala. Sup. Ct, 1993), this Court weighed the right of public access to judicial records with an individual's privacy interest. The Court FINDS that, notwithstanding the Plaintiff's "no objection" to the Defendant's request and after a full review of the aforementioned testimony and documents at this Hearing, the Defendant has proved by clear and convincing evidence that the information contained in documents and presented through testimony promote scandal or defamation; pose a serious threat of harassment, exploitation, and/or physical intrusion to the Parties in this action; and pose the potential for harm to third persons not parties to this litigation. Accordingly, this Court FINDS it necessary to SEAL the entire record of this case, including discovery, before trial and during trial. The Court will re-evaluate this determination after trial. It is hereby ORDERED that the ENTIRE FILE in the above captioned case is SEALED and MARKED AS CONFIDENTIAL. It is ORDERED that the Clerk of the Court is DIRECTED to ensure that the contents in this file are released ONLY to the counsel of record to the herein named Parties. It is ORDERED that counsel and Parties are PROHIBITED from disclosing any contents, documents or information contained within this file to the public, without permission of this Court.

How does that mesh with Alabama law? We will examine that question in an upcoming post.

(To be continued)

Alabama Supreme Court should have an easy call in reversing trial court and restoring Balch Bingham to David Roberson's $75-million fraud lawsuit

Alabama Supreme Court

Former Drummond Company vice president David Roberson has filed an appellate brief seeking to have the dismissal of Balch and Bingham from his $75-million fraud lawsuit overturned. If the Alabama Supreme Court follows its own precedent, Roberson's appeal should be successful -- and the ruling should be fairly easy to reach. 

The Roberson brief is 80 pages long and touches on a host of issues that indicate Balch Bingham should be brought back into the lawsuit to join codefendant Drummond, which had Circuit Judge Tamara Harris Johnson deny its motion to dismiss. (The full Roberson brief is embedded at the end of this post.)

The appeal, however, probably can boil down to two dispositive issues:

(1) Judge Johnson erred in failing to accept as true Roberson's factual allegation that he did not have an attorney-client relationship with Balch Bingham -- 

Johnson apparently found this allegation was conclusory and improperly pled, but that runs contrary to Alabama Supreme Court precedent, as found in a case style Ex parte Austal USA (2007). From our post on the Austal finding:

In Austal, several employees were injured while using a "Miller saw," and they alleged that Austal intentionally injured them, asserting a claim for fraud and stating, "Austal “intentionally made false statements regarding the safety of the Miller Saw” and that those statements were made “with the conscious and deliberate intent to injure its workmen, including plaintiffs, with the Miller Saw so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work. . . .” Austal fraudulently “suppressed, concealed, hid or withheld important facts from the Plaintiffs regarding the known safety hazards associated with the Miller Saw ․ and that Austal knew the tool was unsafe and had made the conscious and deliberate decision to intentionally injure its workmen with the tool so that it could build its ships without having to incur the costs associated with finding a safer alternative method to perform the work.”

Austal labeled the allegations "conclusory" and claimed the injuries were accidental, the kind for which the company was immune from tort liability. The trial court denied Austal's Motion to Dismiss, and the Alabama Supreme Court denied the company's petition for mandamus review. 

The factual allegations in Austal, particularly those involving reliance on false statements, are similar to those in the Roberson case. The Supreme Court's reasoning on denial of a Motion for Dismiss also is instructive for Roberson:

Austal urges this Court to look only to the specific factual allegations pleaded in the plaintiffs' complaint concerning how the injuries occurred and the alleged business motivations Austal had for requiring the plaintiffs to work with a dangerous tool. Those allegations, Austal contends, describe precisely the type of workplace accidental injuries for which it is immune from tort liability. . . . 

At the motion-to-dismiss stage, however, a court's ability to pick and choose which allegations of the complaint to accept as true is constrained by Alabama's broad and well settled standard for the dismissal of claims under Rule 12(b)(6). In this case, there is no question that the plaintiffs have pleaded that Austal “made the conscious and deliberate decision to intentionally injure its workmen.” That allegation -- that a company would deliberately injure multiple specific employees -- is so shocking that it invites skepticism. Moreover, we agree with Austal that a specific intent or desire to cause injury to its employees is not particularly consistent with the alleged cost-saving motivation for causing such injuries. Nevertheless, our standard of review does not permit this Court to consider the plausibility of the allegations. Rather, in considering whether a complaint is sufficient to withstand a motion to dismiss, we must take the allegations of the complaint as true, Ussery v. Terry, 201 So. 3d 544, 546 (Ala. 2016); we do not consider “'whether the pleader will ultimately prevail but whether the pleader may possibly prevail,”' Daniel v. Moye, [Ms. 1140819, November 10, 2016] ___ So. 3d ___, ___ (Ala. 2016) (quoting Newman v. Savas, 878 So. 2d 1147, 1149 (Ala. 2003) (emphasis added)); and “[w]e construe all doubts regarding the sufficiency of the complaint in favor of the plaintiff.” Daniel, ___ So. 3d at ___. Furthermore, a Rule 12(b)(6) dismissal is proper “'only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.”' Knox v. Western World Ins. Co., 893 So. 2d 321, 322 (Ala. 2004) (quoting Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993)).

In this case, regardless of our view on the likelihood of the plaintiffs' ultimate ability to establish the truth of the intent-to-injure allegations, or even to survive the summary-judgment stage, we cannot deny that there is at least some possibility that those allegations are true. Accordingly, the plaintiffs are entitled to at least limited discovery on the issue whether their claims are subject to the exclusivity provision of the LHWCA.⁵ Thus, Austal has not shown a clear legal right to a Rule 12(b)(6) dismissal.

In Austal, the plaintiffs' allegations clearly could be labeled as conclusory; in fact, they border on mind reading. But the Alabama Supreme Court made two central findings:

(a) Despite the unlikely nature of the plaintiffs' claims, they had to be taken as true for purposes of a motion to dismiss.

(b) All doubts about the sufficiency of the complaint must be construed in favor of the plaintiff at the motion-to-dismiss stage.

Johnson failed to apply these standards in the Roberson matter, so her dismissal of Balch Bingham should be reversed on those grounds alone.

Those, however, are not the only grounds for reversal:

(2) Judge Johnson erred in finding the Alabama Legal Services Liability Act (ALSLA), and its tight statute of limitations, applied to Balch Bingham even if Roberson had no attorney-client relationship with the firm.

Again, this runs afoul of Alabama Supreme Court precedent as stated in Mississippi Valley Title Ins. Co. v. Hooper, 707 So. 2d 209 (Ala., 1997) From our post on the Mississippi Valley finding. 

Alabama law is clear that ALSLA -- and its tight statute of limitations, which could make the Roberson complaint time-barred -- applies only where there is an attorney-client relationship. Circuit Judge Tamara Harris Johnson correctly stated the law in her recent order dismissing the Balch and Bingham law firm from the Roberson case, citing a case styled Mississippi Valley Title Ins. Co. v. Hooper, 707 So. 2d 209 (Ala., 1997). Harris wrote:

The Court held further that “an attorney-client relationship is an essential element of a claim under the Legal Services Liability Act... To create an attorney-client relationship,there must be an employment contract‘either express or implied’ between an attorney and the party for whom he purports to act or someone authorized to represent such party. . . . ”

The Court in Mississippi Valley, supra, further held, “The test for determining the existence of [an attorney-client] relationship is a subjective one and ‘hinges upon the client’s belief that he is consulting a lawyer in that capacity and his manifested intention is to seek professional legal advice.”

In our view, Johnson correctly stated the law in the Balch dismissal, but she applied it incorrectly -- and her order should be reversed by the Alabama Supreme Court, where it stands on appeal.

To summarize:

(1) Roberson must have had an attorney-client relationship with Balch Bingham for his complaint to fall under ALSLA and be time-barred.

(2) Roberson said in his complaint that he had no such relationship with anyone at Balch, and that must be taken as true. On top of that, the record shows no sign of an employment contract, "express or implied," between Roberson and any lawyer at Balch. Finally, there is no hint that Roberson believed he was consulting a lawyer in the capacity of being a client. In fact, the words of Roberson's complaint, which must be taken as true, show just the opposite -- that he had no such belief.

For the reasons cited above, the Alabama Supreme Court should have an easy call in reversing Johnson and bringing Balch Bingham back into the Roberson lawsuit.